The Journal reports that the 3D images are "similar to a hologram," and will appear that way thanks to four sensors on the front of the phone.

A phone capable of scanning something -- a living room, for example -- and then presenting 3D images of how the room would look with a new couch or TV could help Amazon sell physical products, said Ramon Llamas, an analyst at the technology research firm IDC.

Llamas said a challenge of online shopping is that a customer can't "touch, feel, sit on" or pick up objects while browsing. "That question is now answered," he said.

Reports that Amazon is developing a phone have been floating around for months. If the report is true, Amazon would be entering a fiercely competitive market dominated by Apple and Samsung.

It wouldn't be the company's first foray into hardware. Amazon already sells the Kindle eReader and the Kindle Fire tablet, and it recently started selling Fire TV, an Internet-connected box that streams content to your TV.

Amazon did not reply to a request for comment from The Huffington Post.